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Monday, 20 October 2008

The IPKat has received a provocative paper from patent litigator Michael Burdon, entitled "An Experiment to Test the Attraction of Simplified Patent Litigation in England".

Right: patent litigation in England has its ups and downs, though regular users of the system say it's a matter of 'horses for courses'

Michael, an active member of the Intellectual Property Solicitors' Association (IPLA), has been exercised by the criticisms made of the current system; he argues here that, with some subtle but significant adjustments, that system can be made to run more simply-- and cheaply. His paper, complete with ten-point plan, reads as follows:

"Background

There is considerable criticism of the cost of English patent litigation. Much of it is directed at solicitors, often pointedly by Judges. Solicitors think the criticism is unfair. Judges, as barristers, were for the most part, isolated from the time-consuming work that is involved in reviewing numerous documents to make the prior art selection, to identify useful material for cross-examination, and explaining to a client the various merits and risks in certain arguments and strategies, and co-ordinating those strategies and evidence very carefully with lawyers in other countries. Solicitors think that barristers are expensive. Another key factor in cost is time to trial. Floating hearing dates and trial windows don't help either. The Judges themselves often do not help contain costs by carefully controlling the length of the trial to ensure that it remains within estimates. Overruns are expensive, not just the extra days, but the time in between. In the heat of trial, people find things to do, and extra daily "refreshers" paid to the barristers fall due. There is an increasing tendency for the Court to request (expensive) scientific assistance, which comes at a cost, usually to the losing party.

We are often referred to the German system where there are hundreds of patent cases brought and heard each year. Why can't we be more like them? The German patent litigation process with its separate consideration of validity and infringement, and its lack of cross-examination, also has its critics.

We are often told there is a huge desire for simplified German-style patent litigation in the UK. Is there? Why don't we do an experiment to find out? We don't even need to change our law and procedure to do so. Everything we need is already there. We just need to apply it more rigorously. Let's set it up and give it a chance. Three years should do it.

The Scheme

What would it involve? Essentially, it would be a stricter version of the streamlined procedure, with some variations. The proceedings would take place in the Patents County Court. Any legal representative with the right to conduct the proceedings could conduct them. Any party with the right to conduct proceedings could be the trial advocate.

1. The initial formal pleadings would happen in the normal way – there is no need to confuse things. The claim could be a standard infringement claim, petition for revocation and/or declaration for non-infringement.

2. The party attacking the patent would be limited to 3 pieces of prior art or other invalidity allegations.

3. The party alleged to infringe, or seeking a declaration, would be required to prepare a product and process description (PPD) if it were not possible to ascertain the relevant features from the product itself. That party should testify to the truth of that PPD, and if required by the other party, offer the responsible person for cross-examination. Any ambiguity or deficiency in the PPD should be resolved, or create a presumption, in favour of the other party.

4. There would be no disclosure or experiments.

5. A trial date would be allocated immediately for a fixed date on conclusion of the pleadings within a 4-6 month window. The trial itself would last two days. The Court would reserve one additional day either side of the two day period – four days in total. The preceding day would be for reading and preparation with the party's legal representatives available to answer questions. The subsequent (fourth) day would be for consideration and delivery of judgment.

6. The parties would exchange summaries of their cases (maximum length of 20 pages) two months prior to trial. The parties would be limited to one fact witness and one expert and provide written statements of their evidence with a maximum of 20 pages each, to be exchanged one month before trial. The parties would be able to supplement their detailed statements of case with a further 10 page document which they would exchange 2 weeks before trial. The Statements and evidence would be provided to the Judge to be read on the day preceding the trial.

7. The parties would have one day each at trial. The party bringing the suit would be able to use 6 hours of the first day to make submissions and cross-examine the other side's witnesses. It would be up to it as to how it apportioned its time. If it found it had time at the end of cross-examination, it could use it for further submissions if it so wished. The other party would then use 6 hours of the second day to cross-examine the other party's witnesses and make its own submissions. Again, it could make submissions before and after cross-examination providing it did not exceed its time allocation. The party starting the proceedings would be given a further one hour at the end of the second day for a very limited reply.

8. The Court would sit from 9.30am to 4.30pm on the first day and to 5.30pm on the second day (subject to the 30 minute extension), with a one hour lunch break. The Court could allow each party an extra 30 minutes (maximum) if the Judge considered he had asked an abnormally large number of questions or the opponent's witnesses had been unnecessarily slow or evasive in response to cross-examination.

9. The maximum costs recovery would be £100k. The parties could not be prevented from spending more, if their clients were so willing, but could recover no more than £100k in total for the cost of all legal representation and experts.

10. In giving judgment, the Judge would allocate a percentage of the costs recovery which the winning party would receive, taking into account any substantive issues on which the losing party had succeeded. The winning party should be entitled to recover 100% (or the awarded percentage) of its actual costs, up to the maximum of £100k (or the awarded proportion).

Additional Notes

The scheme would work best if it was not tinkered with or varied. The rules and timetable should therefore be respected absolutely with no provision for extensions of time or adjournment. It would be possible for a party, or the court of its own volition, to remove a case from this scheme, but such applications should be exceptional and only apply to cases which were clearly not appropriate due to their technical complexity. In general, there should only be one patent in suit in any one proceeding.

The proposed system is admittedly unusual, not least in the reversal of the order of evidence. However, it ought to work. As has been observed, the main benefit of cross-examination is in keeping the witness and their statements accurate and honest. A lot of cross-examination is not actually necessary. It is merely used to reinforce points which are more appropriately made by submission.

The system would be intended to be used with simpler cases but it should not necessarily be limited to simple mechanical devices. A key aspect of cost is the total time to trial. The most costly aspects of the preparation of a case are the painstaking consideration and preparation of documents. The most costly aspect of a trial is its length, including any delay and gaps between trial dates. The timetable and deadlines and document lengths are designed with this in mind. This system is designed to provide absolute limits. Parties might spend more time, and money, in preparing shorter, focused documents, but (1) they will not recover any costs in excess of £100k and (2) the other side (and the Court) will not need to spend time considering them.

It ought to work. The German and Dutch courts decide relatively complicated patent cases after a hearing which normally lasts no more than one day. They do so largely on the basis of relatively short documents which are presented to them, with relatively short oral submissions. The proposed scheme preserves the possibility of cross-examination, principally because it is the threat of cross-examination which helps to keep the written evidence accurate and truthful. The Judges ought to be able to give their decision the day following the hearing with the period of the trial and the following morning for contemplation and preparation. The judgments are likely to be shorter in length, and will not necessarily deal comprehensively with absolutely every issue. That is no bad thing. All forms of justice are ultimately imperfect. A system which is prohibitively expensive is also unjust. The proposed scheme seeks to minimise the amount of imperfection in proportion to the appropriate cost.

We are told patent litigation in England is too expensive. We are told there is an appetite for a truncated, less-expensive forum for patent litigation in the UK. The streamlined procedure has not, to date, been successful, mainly because it has not been applied rigorously. The proposed system seeks to overcome these shortcomings. It will require rigour and discipline, most importantly from the responsible Judge, but also support from the appellate courts.

No doubt there are those that will find reason to quibble with some or all aspects of the proposed scheme. It is admittedly imperfect. But that is not the point. The proposed scheme would meet what we are told is the apparent appetite for simplified, lower-cost, patent litigation in this country. Let's put it to the test!"

The IPKat, who is all for empirical research, would love to see this experiment in action and thinks it would vastly enhance the standing of the English courts as well as making the Patent Litigation Experience hugely more enjoyable. Merpel is not so sure: she wonders whether there might be so many people with a vested interest in slow, expensive trials that the experiment might fail for want of people prepared to make it work.

If you've any comments on these proposals, please post them as comments below or email them to the IPKat here.

2 comments:

Anonymous
said...

Heaven knows, there is an unmet need here, which this scheme could meet, elegantly side-stepping not only the expense of English litigation but also the poor fact-finding in Germany. But how on earth are you going to bring together 1) litigants wanting to give it a try with 2) litigators willing to risk their reputations. English litigation currently provides the niche market of forensic demolishing of high value patent claims (pharma) ostensibly strong but actually vulnerable to evidence of invalidity exposed by expensive English fact-finding. Moving beyond that niche will take an enormous concerted effort. Can't see it myself.